On the sidelines of the plenary session in Strasbourg, on Tuesday 29 May, the European Commission finally retained three categories of regions (the less developed regions, those in transition and the most developed) for allocating funds in its final proposals for cohesion policy 2021-2027.
The Commission has in fact back-pedalled. Article 102 on the geographical coverage for ERDF, the European Social Fund Plus (ESF+) and the Cohesion Fund of the regulation laying down common provisions, thus provides for funds to be allocated on the basis of the three existing categories of regions (NUTS2).
Regions lagging the most behind in development remain those with GDP per capita of less than 75% of the average in the European Union of 27. The regions in transition are those with GDP per capita of between 75% and 100% of the European average. The most developed regions are those with GDP per capita above 100% of the average.
Until a short while ago, the Commission had envisaged keeping only two categories of regions, a first group of regions with GDP per capita above the European average; and a second group with GDP per capita below a certain percentage of the European average. The watershed line was to be fixed at 100% of GDP per capita.
Three categories of member states
On the other hand, the Commission has kept three categories of member states for thematic concentrations, instead of the three categories of regions, in the proposal of the ERDF regulation and the Cohesion Fund, as we had pointed out in our article 2 (see EUROPE 12021).
In the article devoted to thematic concentration for ERDF aid, the Commission provides for three groups of member states: - a first group of member states with GNI per capita above or equal to 100% of the European Union average; - a second group whose GNI per capita is above or equal to 75% and below 100% of the EU average; - and a last group of member states with GNI per capita below 75% of the EU average.
Depending on the group to which they belong, member states will then be under an obligation to direct resources to priorities reduced to five in number: - priority 1: innovation and smart economic transformation; - priority 2: climate change and energy transition; - priority 3: digital connectivity and transport; - priority 4: social dimension linked to a European social rights base; - priority 5: inclusive urban, rural and coastal development.
New indicators
The Commission has been speaking of this for some time and has amended the so-called “Berlin” system, which focuses on GDP per capita to determine the national budget envelopes, to introduce criteria taking youth unemployment into account, the level of education, the consequences of climate change and the hosting and integration of migrants. The Commission sets out the details of these new criteria in Annex 22 of the regulation laying down common provisions.
For the Cohesion Fund, the method of allocation would be that currently in force: member states that are to benefit from the fund will be those whose GNI per capita is below 90% of EU average.
Financial instrument
Another major innovation is the introduction of Article 10 of the regulation with common provisions allowing member states to use up to 5% of funds from ERDF, ESF+, the Cohesion Fund and the European Maritime and Fisheries Fund for the future major EU financial instrument, InvestEU.
Transnational maritime cooperation
In the regulation dedicated to European regional cooperation (Interreg), as set out in detail earlier this month (see EUROPE 12024), territorial cooperation in the maritime area will remain transnational and at the level of maritime basins. Regional cooperation at cross border level in the maritime area was abandoned by the Commission. It should be noted that the United Kingdom is explicitly mentioned as being among the third countries for future regional cooperation.
Other new aspects
Many of the other major innovations, largely well known, include strengthening of the link with the European Semester budgetary process, the creation of a single regulatory corpus, thematic concentration going from 11 to 5 priorities, the introduction of many simplifications especially at the beginning of programmes, the possibility of reprogramming through mid-term examination as well as the introduction of new criteria for allocating funds.
Detailed budget
The Commission, moreover, in the regulation laying down common provisions, detailed the breakdown of the budget for cohesion policy: out of €330 billion (constant 2018 prices), some €200 billion would go to the ERDF, including €8 billion for regional cooperation. This would be a drastic reduction, all the more as regional cooperation would take more funds into account, according to one source. The ESF+, to be presented on Wednesday 30 May will be allocated €88 billion, while the Cohesion Fund will receive €41 billion.
Furthermore, the Commission presented a country-by-country allocation from the overall envelope. According to analyses by several media, including The Financial Times, the Commission has proceeded to a transfer of funds from Central and Eastern Europe to member states in southern Europe.
To consult all the European Commission’s proposals, see: https://bit.ly/2xlMMa E (Original version in French by Pascal Hansens)